IT Firms Must Focus On Home Market

In the backdrop of the U.S. election, Brexit and challenges in Europe, Indian technology providers seem to have increased their focus on the home market, where sectors such as retail, telecom, media, travel, logistics, oil, power and hospitality are poised for deeper tech deployments, say global analysts.

Hansa Iyengar, senior analyst, advanced digital services, Ovum, said, domestic market, in the current context, would be much better for Indian technology providers than chasing newer customers in key markets such as Europe and the U.S.

“Retail, telecom, media, travel, logistics and hospitality are important sectors, and most desi providers have existing engagements in some of these verticals. In this year and near term, we expect these relationships to grow substantially with India as a whole being on a rapid modernisation drive,’’ she added.

Commenting on the market scenario, R. Ray Wang, principal analyst, founder, and chairman of California-based Constellation Research, Inc. said, “There are too many sellers chasing buyers in key markets. We expect clients to reduce the number of vendors they work with and seek more help in digital, AI and automation.’’

Growing North America

So, the home market would open up near-term growth opportunities for Indian providers, although the long-term prize would still be around growing accounts in North America and increasing market share in EMEA (Europe, Middle-East and Africa), stated Mr. Wang.

As per Chicago-based analyst firm HFS Research, data explosion, digital disruption and customer experience have emerged as the top three drivers impacting business operations. Offshoring and traditional outsourcing has lost its mojo. But the promise of emerging technologies across the Triple-A Trifecta (automation, analytics, and artificial intelligence), cloud, IoT and blockchain is unquestionable.

“However, the “how” to scale these technologies to realise their promise continues to be a black hole. Indian service providers, who can help clients get to the promised land beyond the piecemeal initiatives, POCs (proof of concepts) and pilots are the ones that are likely to succeed,’’ said Saurabh Gupta, chief research officer at HFS.

On the changing environment, Mr. Gupta said, a clash of cultures was imminent. “The socio-political environment across the globe was increasingly becoming bipolar – us versus them, right or wrong, 0 or 1! But emerging technologies from AI to Quantum are forcing us to get comfortable with probabilistic answers.’’

As per a market outlook analysis by HFS, all silos that are existing in organisations will soon crash. As customer experience takes center-stage, organisational silos around front-, middle-, and back-office are starting to collapse to create boundary-less entities where there is only “OneOffice” that matters – an office that caters to the customer.

Pecking order has nothing to do with size

Analysts said it was good to keep a closer look at the mid-cap firms like Mphasis, Hexaware, LTI, etc, beyond the TWITCH (TCS, Wipro, Infosys, TechM, Cognizant and HCL).

”While scale is important, it stops mattering at a certain point of time. Also, our recent research suggests that 75% enterprises believe that the service providers who get them here might not be the ones to take them into the future,’’ added HFS’ Mr. Gupta.―The Hindu